The FSA has fined investment adviser TBO Investments Limited (TBO) £28,000 for failing to clearly document the explanation of transactions risks to clients.
It also failed to make and retain records that demonstrate the suitability of its advice and ensure that its business is conducted in accordance with FSA requirements.
The FSA also found that between December 2001 and October 2007, TBO failed to adequately supervise and monitor staff providing advice to customers and arrange adequate systems and controls in relation to trust signatures.
Jonathan Phelan, FSA head of retail enforcement, says: “Obtaining and clearly recording enough information from customers to ensure the advice given is suitable is an important part of treating them fairly, particularly in areas such as long-term savings and pensions, where the wrong decisions could lead to hardship in retirement.
“Where we have concerns about the quality of the advice given, we will require firms to undertake reviews of past business, often at considerable cost to them, to identify and remedy any unsuitable advice.”
In order to address the potential risk of unsuitable recommendations having been made to customers, TBO has appointed an external compliance consultant to undertake a past business review of a percentage of sales of certain products selected on risk-based criteria.
This should allow the firm to identify any unsuitable recommendations, assess any loss to customers and pay appropriate redress where unsuitable advice has led to loss.IFAonline
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